Charity marketing techniques lose their magic

LONDON - Charity marketers are having to adapt their strategies to lift donor numbers and build on the contributions of existing supporters in a crowded sector. The season of goodwill is long over, but for charities' fundraising and marketing departments, the challenge is to keep donors' cash flowing the whole year round. Already, 2008 looks likely to present some hurdles.

Charity marketing techniques lose their magic

Donations in 2007 dropped 3% on 2006, according to the annual National Council for Voluntary Organisations and Charities Aid Foundation Giving Report, suggesting that worries about an imminent recession are beginning to bite. Meanwhile, although charities raised £43bn last year, 49% of this total was accounted for by just 0.39% of the UK's charities, illustrating the fundraising power of big brand names.

The report also showed that numbers of first-time givers increased by only 2%. 'It is increasingly expensive to recruit donors, especially regular givers. This fall in donors comes at a time when charities are being asked to be more transparent and open about how they spend their money,' says Kate Green, head of consultancy Think Intelligence. 'We face a potential vicious circle whereby fewer available donors leads to more competition to recruit donors, which in turn raises acquisition costs, which makes charities less cost-effective, which makes people less likely to want to give to them and so reduces the pool of donors even further.'

While their intentions are altruistic, charities have become more cut-throat in their attempts to win donations, mainly driven by the basic need to survive. The sector is substantially more crowded than it was 10 years ago, with 3758 new charities registered in 2007 alone. Marketing techniques are becoming more sophisticated, but they have to keep up with donors, who are bored of being bombarded. And later this year, the Institute of Fundraising is set to produce a code of practice that may seek to prevent charities from using guilt tactics in direct marketing to extract cash from donors.

Traditional methods such as cold mailings are beginning to lose their edge for some. HIV and AIDS charity Crusaid, which focuses its fundraising on World Aids Day on 1 December, trialled a cold recruitment pack late last year with disappointing results. 'The pack performed well, but not with the response rates expected,' admits Jordan Hay, Crusaid's head of marketing, fundraising and communications. 'There were various reasons for this, such as the nature of the cause and poor lists, but having spoken to others in the charity sector, cold mailings are not getting the response they once did.'

About a third of charity mailings are thrown straight into the bin (33.74% of the sector's mail goes unopened, according to Nielsen Media Research), yet the sector is the third-highest spender on direct mail, with spend increasing 7% to £229m, accounting for 73% of charities' marketing budgets.

The controversial face-to-face method of recruiting donors on the street (colloquially known as 'chugging') continues unabated, with Samaritans looking to roll out a national programme following a successful pilot in 2006. However, research shows most of the organisation's supporters still prefer to be contacted through its quarterly direct mail, which raises £5m a year, including legacy donations. Email marketing, social networking and an ecommerce site are also being trialled, but the charity admits it has been slow to harness new technology for marketing, despite now making the most of it with its listening service, which can be accessed via the phone, email, SMS and soon instant messaging.

Amnesty head of supporter recruitment and development Charlotte Thrower is experimenting with field marketing as an extension to street fundraising, which the organisation continues to use with good results. Fundraisers chat to people on the street to gauge their interest, then follow up with a call asking them to donate. During the interim period, potential supporters are asked to carry out an Amnesty action, such as writing a letter, which helps encourage them to be more involved. 'Field marketing won't replace street fundraising but will work alongside it,' says Thrower.

Although Amnesty plans most of its campaigns in advance, it is able to react to world events and use their potential for gathering new supporters. For example, the protests in Burma last autumn prompted the charity to run a text-message campaign, following positive results for this channel. Social networking and blogging are also likely to perform well because of their two-way nature. 'The most successful charities will be those that adopt an attitude that puts the donor in command of communications and identifies the channels that can make this happen,' says Green.

But the challenge will be converting those who pledge their support in this way into donors. For example, Amnesty's successful 'unsubscribe' campaign last year, which attracted more than 200,000 supporters, asked donors to unsubscribe to the war on terror by filling in an online form asking for more information. 'It's the first time we've put social networking at the heart of a campaign and we see it as the first stage of our engagement,' says Thrower. 'It's new territory for us, but it has huge momentum.' The next step will be to find a way to persuade these supporters to donate.

Many charities focus their fundraising calendar on a particular date, such as Christian Aid Week (the second week in May) or the biennial Red Nose Day. However, as the market becomes more crowded, charities are being forced to work harder to maintain their niches. October, for example, has become a hard-fought battleground for charities because research has shown that consumers have more disposable income available at this time of year, having recovered from the expense of the summer holiday, but yet to start spending on Christmas. However, the gradual colonisation of this month by breast cancer awareness campaigners has squeezed other organisations with activity focused on this period. While the tactic is effective for the cancer charities, insiders have claimed it has hit other causes' revenues hard.

At Jeans for Genes, which has traditionally geared all its marketing around one day in October, the fight for wallets means that each year it must find a new theme and ideas to keep supporters on board. 'The basic fundraising mechanic - wearing jeans and making a donation - is a brilliant, tried-and-tested way of making money, but, as the years go by, we want to keep the same people engaged,' says the charity's head of communications, Ros Freeborn.

In 2007, a 'denimisation of the nation' theme provided scope for the advertising, PR and marketing materials, with a social networking microsite that adopted the moniker. The charity's takings from 2007 currently stand at £2.5m but, says Freeborn, this is expected to rise to £3m - a similar amount to the previous year. 'We're standing our ground,' she adds.

No organisation can afford to stand still in the prevailing atmosphere of economic uncertainty. While only next year's giving report will prove whether donations are consistently dropping or 2007 was just a blip, charities must make creative use of the full spectrum of communications channels available to them to persuade donors to part with their cash.

Case study: ActionAid

Development charity ActionAid needs to maintain a consistent level of committed givers who pledge £15 a month. It does this by running a variety of ads across different channels throughout the year. Rather than paying special attention to a particular date, the charity reviews its marketing regularly and schedules fresh creative when a specific channel's impact shows signs of weakening.

Currently, DRTV, inserts in titles such as The Guardian, press ads, face-to-face fundraising and phone calls work well, while direct mail is proving less effective. One third of new child sponsors arrive via ActionAid's website, but will have been prompted to go there by activity in other media. The charity will concentrate on its brand to attract new donors, testing mobile and internet communications and promoting other activities as well as giving money.

'New Year is strong for us. People tend to make New Year's resolutions and child sponsorship is an ideal way to do something good,' says director of fundraising Richard Turner. 'It's just as important to keep supporters as it is to recruit new ones. This will be a key priority in the year ahead.'

Case study: Oxfam

In a competitive landscape, innovation is vital, and Oxfam's tie-up with high-street stalwart Marks & Spencer should certainly engage consumers.

A £5/E7 M&S voucher is being offered to people who make donations of M&S clothing to Oxfam's 790 stores in the UK and Republic of Ireland. The campaign, dubbed the M&S and Oxfam Clothes Exchange, launched last month on the anniversary of M&S' 'Plan A' eco-initiative and is being promoted as the biggest clothing recycling campaign in the UK.

The voucher, which will last for one month, can be used for purchases of £35/E50 and above of M&S clothes, homewares or beauty products. The programme is being run on a trial basis, initially for six months.

Clothes donated can be of any vintage, but the vouchers will not be available to people donating M&S' most commonly sold items - underwear and socks. While Oxfam's stores will benefit from the potential clothing sales, the plan is also intended to help reduce the amount of clothing sent to landfill each year. Clothes that are not in a good enough state to resell will be recycled.